At the World Economic Forum in Davos 2025, Prashant Ruia, CEO of Essar, spoke with Siddharth Zarabi of Business Today on a range of topics, from industry outlook to company updates. While acknowledging the inevitable shift toward cleaner fuels, he emphasised that fossil fuels will continue to play a significant role in India’s energy mix in the years ahead. He focused on Essar’s growth strategy, outlining how the Group is investing in and building ecosystems around hydrogen, green steel, green mobility, and more – designed to thrive in the years to come. He also highlighted key initiatives, including industrial decarbonisation projects in the UK under Essar Energy Transition and round-the-clock renewable energy projects in India – critical steps toward Essar’s vision for a sustainable future.
Interview Transcript
Siddharth Zarabi – Hello and welcome to Business Today. I am Siddharth Zarabi, and with me here at the Davos brainstorm is Prashant Ruia, the Director of Essar. Prashant, welcome. The sun is out and I want to begin with what has happened in the United States. President Trump has taken office and several early decisions that he has taken, he seems to be holding off on a full-fledged tariff war for now. But when it comes to climate related aspects, there seems to be the beginning of a roll back. I wonder if you had sense to absorb what he’s announced, and what kind of broader impact is it likely to have?
Prashant Ruia – First of all, thanks Siddharth for having me. Well for someone originally from the oil and gas business-Drill, baby Drill sounds pretty good as a concept, because I think for too long, people have had this impression that, you can transition into green fuels much faster than what’s actually happening on the ground. There’s a lot of focus on electric vehicles and things like that. But I would say, there’s a still a long runway to go before the transition takes place and in the last 10 years, people sort of lost sight of that and started saying no to any investments in the oil and gas business, or similar businesses. I think this is a welcome correction.
Siddharth Zarabi – And do you see a significant turning of the cycle now, with the new policies that the US is likely to adopt?
Prashant Ruia – I don’t think they’re going to really turn their cycle. I mean, after the shale oil revolution, they are the one of the world’s, if not the world’s, largest oil and gas producer. And if you really think about the growth of America and the competitiveness of America, it actually happened after they found shale gas and shale oil. They grew from being 4- 5 million barrels a day to now to 10 -11 million barrels a day. And this changed at a very low cost. So their energy costs are very low. It’s still the one of the cheapest places in the world to find gas or to buy gas. This really boosted their competitiveness and ability to manufacture locally. And now, I mean, it’s going to be more of that, but I don’t think it’s going to really turn cycles, you know, if there is competitive industry, where you can do energy transition at a competitive basis. I think that’s going to grow as fast.
Siddharth Zarabi – And you know I don’t know how many people realize that even the AI revolution is based on cheap energy, and without cheap energy in the United States the AI revolution would also have found it difficult because of the vast amounts of power that it guzzles. Before I come to the India point just one more thing about the global sort of situation I had the Chairman of Indian Oil just a little while ago right here on the same seat and he gave us a sense about the fact that, he still believes that in the long run at least half of the total energy output, and by consequence therefore consumption in India, will remain fossil fuel, 25% will be alternative. Is that something that you also share as an assessment in terms of how the mix will play out?
Prashant Ruia – Well it’s tough to give a percentage but I do know that, as I mentioned earlier, fossil fuels will still play a major role in our energy basket for many years to come. Over time India has a very big benefit with solar power, the cost of delivering solar power in India is very low – cheaper than gas cheaper than coal. With the battery technology coming in, we still have to solve the storage problem but if in few years (don’t know exactly how many years) we are able to address the storage problem then it will be an inevitable shift towards electric. Currently as we know, we import 85% of our fuel – crude and gas and if we can replace that with solar – the low-cost solar energy from India, I think it will be a revolution because it will be the first time in the history of India that we can generate our own energy without importing, a similar kind of revolution that took place in the US when they found shale oil and shale gas. I think it’s possible with the solar in India, but you know it’s getting there we’re getting there I mean, our Prime Minister’s goal of 500 Gigawatts by 2030 is a very ambitious goal and if you put that in context of what’s happening around the world, it’s one of the largest solar programs anywhere in the world and we’re already up to more than 200 GW of Renewable Power (not only solar all dynamics), so yeah I mean there’s an inevitable shift but fossil fuels, I think will be there for a long time.
Siddharth Zarabi – Essar has been building almost a 10 GW power portfolio which includes Renewables, gives us a sort of update on where that stands where’s the roll out and are you now looking at going beyond that target as well?
Prashant Ruia – First of all, Essar has been involved in the power sector from a long time, so we were one of the first to enter the power sector. We first set up a gas based plant in the late 80s! That was even before Enron came to India. So we’ve been in the power sector for a long time. Obviously, the earlier power investments were largely around coal and natural gas, initially natural gas, than coal, but now going forward, our goal is to build about 8 to 10 Gigawatts in the next four to five years. It’s not a very aggressive or ambitious plan, because many people have much more aggressive plans than what we have, but our idea is to build a portfolio of round-the-clock renewable power which is actually in a way trying to bridge, how we can use renewable power as a 24 hour solution as opposed to just a you know intermittent solution for 10-12 hours a day. So that’s the kind of business we are we are building and at this point of time if we can get that done, I think we’ll be pretty good.
Siddharth Zarabi – You know, I don’t know how many of our viewers would recall the very successful, massive digester you did of the oil business. But you also run a similar operation, smaller size one in the United Kingdom, the Stanlow refinery, you’ve been putting in place several initiatives there. How’s that business doing?
Prashant Ruia – Well, again, Siddharth, what we are really trying to do is build four to five ecosystems which are all towards energy transition, decarbonisation, basically replacement of fossil fuel technology. So that’s the broad overview of what we are looking. The industrial decarbonisation investment we are doing in the UK is one of them, and our goal there is to have the world’s first decarbonised refinery. There is no other refinery in the world which has this program, what we have been able to do, I must say, with massive support from the UK Government. And it’s because of their net zero program that they have announced that it’s possible for us to, to become a player as part of that whole Net Zero program. And we’re doing an industrial decarbonisation of the refinery by building blue hydrogen plants, replacing all the fuel which we have with hydrogen, and also doing industrial carbon capture. We will have all of this in place over the next in the next four to five years from now.
Siddharth Zarabi – Prashant, since you spoke about the UK government support, I wonder if you could draw a comparison between what the UK is doing when it comes to decarbonisation versus where we stand from an Indian policy architecture.
Prashant Ruia – Very different policy. So the UK and Europe have taken a much more aggressive view on decarbonising, basically, there is a huge tax, which the every manufacturer pays in Europe for CO2, I mean that to me is the key decision difference, difference in decision between European policy and between Indian policy or Asian policy for that matter. So in the UK or in Europe, we pay now, currently about $60/ton of CO2 tax and because companies are forced to pay that tax, they are much more aggressive in trying to decarbonise, because otherwise it’s a huge burden on your balance sheet. The government itself is supporting all these investments with various programs, which basically the cost for difference program or a capital subsidy program. There are various programs under which they support investments being made by companies to decarbonise and they have quite an ambitious goal for 2030 to decarbonise industry. And we’re really pleased to be part of that program. India is going at it differently. We don’t have a CO2 tax.
Siddharth Zarabi – I hope nobody in government listens to that and gets an idea for a new tax. I just hope the GST Council doesn’t hear this part of the conversation.
Prashant Ruia – So we don’t have a CO2 tax, but we are doing it slightly differently. We are encouraging technology and low cost solutions, which are competitive to really thrive. And it’s a very interesting way of doing it, and we have the ability of doing that because of low cost renewable power, solar power, electric mobility. There is no subsidy involved from the government, and we are yet being able to compete against fossil based technology. So for example, today’s solar power is much cheaper than coal based or gas based power. I think electric vehicles, very soon will also become very competitive without any subsidy in the market. So that’s the shift taking place. It’s a very interesting way of doing it. I don’t think Europe has that option, because their cost of renewable power is much higher than what India has.
Siddharth Zarabi – I remember, it was at Davos itself a couple of years ago for Essar being one of the few examples of completely deleveraging its balance sheet and undertaking a lot of pain and sacrifice in some ways in that process. I wonder if you look back from then to now in terms of the progress for Essar 2.0, how would you review what’s happened and looking ahead.
Prashant Ruia – Well, there’s no doubt that the deleveraging program and the monetisation program we did was a lot of years of hard work which my father, uncle, and the whole Essar Group put in, but it was a decision which they took and I think, in hindsight, being able to deliver the balance sheet and getting serious value for the assets which we built was, in a way, it provided us the opportunity to be able to pivot the Group into all these new investments, which we are able to do with a much lighter balance sheet. I think the other big shift is we are much more focused around building equity value as a Group, as an investment thesis. Earlier it were focused on equity value but it was also focused on trying to build market share and create and using larger capacity, and, yes, leveraging to the extent which was designed. But I think right now, the focus is much more around new technologies which can be taken to the market much faster compared to before, like you’re building a steel plant- It’s a five, six year investment cycle. You’re building renewable power, or any of these businesses, two years. So much faster investment cycle get to the market faster, and hopefully we can create value. And at the same time we are investing in new technologies which will be there for the next 20-25 years. So the deleveraging and the monetisation has actually afforded us that opportunity to do, which we’re very grateful for.
Siddharth Zarabi – You know, how would the Essar business portfolio look, let’s say, five to 10 years from now? What can you tell our viewers?
Prashant Ruia – Well, as I said, the Group’s holding company is Essar Global. We are looking at it as making equity investments in and building businesses in spaces which are futuristic, which is building ecosystems which will last for the next 20 years. It’s also cutting edge technology to help build these businesses. So in the end, if you say 10 years from now, I hope we are able to build at least four or five ecosystems which will address this large market, whether it is in the power space, whether it’s in the energy space, whether it’s in the in fossil fuel replacement space, whether it’s in green steel. And all of these spaces, are the sectors which we have always invested in for the last 20 years. It’s not different, but it’s with the newer technologies and we think these technologies will last for 20-25 years. And we certainly hope, that at the end of the day, we can build value in these investments.
Siddharth Zarabi – You know, since you spoke about the future and technologies, I want to pivot the conversation to one of the broader themes, which is the rise of AI agents and everything, and that is impacting industry and consumers your own sense. Because, you know, you also had a telecom business at one point of time, you’ve been early movers in that space. Also, what is this moment like when it comes to AI for India and businesses?
Prashant Ruia – I don’t think we have really understood the impact and the capability of what AI can do. The increase in efficiency, speed and reduce requirement for manpower at the same time is a very deadly combination. A couple of days ago we went and visited Elon Musk and saw the SpaceX launch with this group of Indian entrepreneurs & businessmen. It was a lot of fun, because it was amazing to see the SpaceX launch. But we then had a conversation with Elon, just the way people are thinking about AI, the speed of processing which computers are now doing. I think any company which does not have a very, very strong data science digitisation transformation plan, I think, is in trouble, because in five years’ time you’re going to be left behind.
Siddharth Zarabi – Did Elon talk about India? Anything that you can share with our viewers? We were supposed to come that didn’t happen last year.
Prashant Ruia – We didn’t get into too much about India, but we certainly got into things like what’s happening in some of these technologies.
Siddharth Zarabi – In his entire business portfolio and the Department of Government Efficiency, I think that’s going to keep him busy for some time. Okay, I want to wind down the conversation with regard to the sense you’re getting from all your counterparts globally, with India, the China plus one story right after COVID, the challenges to the Chinese economy and the new opportunities that are coming up in in the new Trump administration, the change in the trade order that we might see. What’s your sense about India that you’re picking up?
Prashant Ruia – Let me just come first to India. Then we can talk about the other countries. I think India, our growth has certainly slowed down a bit. And I think it’s got to do to some extent with the level of private sector investment taking place. And there’s a lot of investment coming from the government, which is all in fantastic projects – infrastructure, roads, airports, all of this stuff, which we are all witnessing and enjoying. But private sector investment, to some extent, has not kept pace with government. And I think that’s one of the reasons why we are seeing a little bit of a slowdown in the economy.
But the opportunity which we have is still the same. The China plus one opportunity is very serious. We can become an alternate marketing. I mean, supply chain, manufacturing base for the US, Europe, for the rest of the world, plus I don’t know how Trump’s tariffs going to play out but the opportunity is still massive for Global Capability Centers. And if you think about AI being such a big thing in the future then the opportunity for Indian companies and Indian engineers to be part of that whole investment cycle is another massive opportunity. And obviously the fiscal situation in the country is very good we have in a very strong fiscal situation.
Everybody is sort of going against and pushing back China but the kind of technology revolution which is happening there, for people who have seen it they know it but for people who have not seen it, they are light years ahead of many countries put together in terms of certain technologies – renewable, power batteries, EV. All of these spaces they are investing so heavily in R&D, they just have such a big amount of capacity they’ve created is equal to the world’s demand. They have the technology, they have the capability, they have the capacity and so I still feel that I don’t know how it’s going to play out in terms of taxes or imports but they’re going to still play a very major role.
Siddharth Zarabi – Absolutely and for the Indian context viewers I think a bit of the thaw between India and China also seems to be something that’s underway and hopefully that should remove some of the irritants that we’ve been seeing on business of course the terms of the bilateral trade not really in favor of India but that will take some time to overcome and fix. As Prashant Ruia said they’ve developed a very large base where for anyone to target it or catch up will take some doing.
Prashant Ruia – thank you very much for your time for updating us on where Essar 2.0 stands with regard to its future business portfolio. With that it’s a wrap on this conversation from the Davos brainstorm here at the World Economic Forum. We will continue our coverage do stay tuned in. Thank you.
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